By ANDREA JAMES, P-I REPORTER

Published 10:00 pm, Sunday, December 21, 2008

As online shopping grows more popular, consumers are increasingly relying on the opinions of people they've never met.

These opinions, offered by names such as "Anonymous," or "Skater" or "Crazy Cat Lady," cover all kinds of products, no matter how expensive, cheap, big or small. (Twelve people have reviewed a lint roller refill on Drugstore.com.)

In the Internet's ever-growing social community, people trust one another more than advertisers. And retailers are increasingly figuring that out. Businesses are incorporating customer reviews into their marketing campaigns, providing links to top-ranked products and in some cases, flirting with the idea of making the reviews accessible via cell phone in brick-and-mortar stores.

"Online reviews have changed everything. It sounds so perfect. Anyone and everyone can share their experience with a product or service," said Michal Ann Strahilevitz, marketing professor at Golden Gate University in San Francisco. "It is as if all online shoppers have an instant community of friends, recommending the good and warning about the bad."

But the system isn't perfect, she said. Some people rate everything they try; others never rate anything. Also, merchants and competitors can disguise ulterior motives behind fake names.

"Generally, the greater the number of reviews, the more likely the average is to be accurate. Comments also help. If extensive comments are made, and the writing style varies, that is a good sign," Strahilevitz said.

The next frontier in user reviews will come as luxury retailers adopt them and as ratings systems become more elaborate, experts say.

Seattle-based Amazon.com, a pioneer that allowed reviews when it launched in 1995, lets users rank each other for credibility. The company also uses tags to distinguish top reviewers and people who use their real names.

"When we first did it, we got letters from publishers saying, 'Maybe you don't understand your business. You make money when you sell things,' " Amazon founder and CEO Jeff Bezos told BusinessWeek four years ago. "Our point of view is, no, we make money when we help customers make purchase decisions."

This holiday season, Amazon assembled a team of six real customers to give advice on goods and dubbed them the "tell-it-like-it-is consumer advocates." The reviewers received free products as part of Amazon Vine, a company program that gives products to select Amazon customers in return for their opinions.

Increasingly, retailers are realizing what Amazon knew early on: When consumers make smart decisions, retailers benefit, said Patti Freeman Evans, a vice president and research director for Forrester Research.

"Consumers who actually read these reviews and find them valuable are more likely to be more loyal to that store, shop more frequently with that store and are less likely to return the item," Evans said.

All retailers aren't necessarily comfortable with negative reviews, but they are learning to get over it.

"What they've found is there's a lot of value in that negative review," Evans said. "Wouldn't you as a retailer want to know if there's a problem with the product?"

David Lonczak, chief marketing officer of Bellevue-based Drugstore.com Inc., said reviews have helped his company to better communicate with suppliers. In one case, a manufacturer added an inner seal to a product because reviewers complained about leaks, he said.

"The user-generated content, whether written or video or otherwise, has become more and more dispersed and more and more available and it has started to prove to be quite valuable," Lonczak said. "Shoppers are looking for, 'What is real, what can I believe? I can't touch the product or feel it or smell it, how can I be sure what is right for me?' "

Drugstore.com, which has a sister site, Beauty.com, has allowed user reviews since 2003. Since they upgraded their system earlier this year by partnering with PowerReviews, daily input is up 250 percent, Lonczak said.

Drugstore.com sends e-mail reminders to customers, asking them to submit reviews. The site labels reviewers who have bought products as a "verified buyer."

"We know that customers are depending upon their peers to help them figure out what works and what doesn't work," Lonczak said. But, "we don't want the ability of anybody to come to the site and write a review, or a manufacturer dissing another manufacturer's product."

San Francisco-based PowerReviews helps Web sites with their online customer review platform in exchange for the right to put those reviews on Buzzillions.com. Its clientele has reached 550 and is growing.

PowerReviews co-founder and CEO Andy Chen says the turning point came three years ago when even brick-and-mortar retailers began to realize that a bad review isn't the end of the world.

The most frequent question that company executives still ask him is, "What do I do with negative reviews?" He tells them that negative reviews add credibility.

If a company deletes a negative review, the consumer who wrote it will notice and get a bad impression. Also, four-star rated products sell better than five-star ones, Chen said he's found by studying data sets provided by clients.

"If they see no one who's unhappy, they immediately think they can't trust the entire set of reviews," Chen said.

PowerReviews moderates reviews and deletes less than 4 percent, Chen said. The goal is to encourage constructive debate, not verify accuracy.

Thus, if someone loves a product but hates the customer service, that review is deleted because it's not about the product. Or, if someone posts where to find the same product cheaper elsewhere, it is deleted, Chen said.

Multibranded retailers, such as REI, have learned that bad reviews do not drive away sales but shift them to a similar product on the site, said Chen, whose company works with Seattle-based Recreational Equipment Inc.

Despite widespread adoption, anonymous reviews still draw criticism, especially from bad review victims. At its worst, anonymity encourages vicious lying. But at its best, it is self-correcting and frees people to be honest.

"It's the anonymity that Amazon grants to its reader-reviewers that I objected to, on the grounds that anybody who wants to say something nasty about somebody else's work ought to have the little bit of bravery needed to say it under his or her name," Bernstein said in an August letter that ran in the International Herald Tribune.

"We work really hard to not let folks game our system," spokeswoman Cheryl Reed said. "We think it's a distinction that makes a huge difference. ... Companies can't put themselves on the list, nor can they report on themselves. We do allow them -- free of charge -- to respond to reports, though, and we display the responses next to the report in question."

But anonymous review are the norm, and seem here to stay.

Four-year-old Yelp.com, based in San Francisco, boasts about 4 million reviews of restaurants, bars and businesses that draws about 15 million visitors a month. Yelp even lets people rate itself. "You suck ... but I still love you," one wrote.

Seattle-based Onlineshoes.com has embraced user reviews. For CEO Dan Gerler, a shoe industry veteran, the reason is simple: He relies on the reviews himself. "Consumers have the greatest faith in other consumers."